New York (Reuters): One of Merck & Co’s most important experimental drugs, blood clot preventer Vorapaxar, has been deemed inappropriate for patients who have suffered a stroke, dashing investor hopes and erasing nearly $8 billion from its market value.
Vorapaxar, meant to prevent heart attacks and strokes or their recurrence, was considered a crown jewel in Merck’s $41 billion acquisition in late 2009 of Schering-Plough Corp and deemed capable of generating annual sales of more than $3 billion. “The market is wiping it out,” Deutsche Bank analyst Barbara Ryan said of Merck’s 6.6 percent stock decline on the news, suggesting Wall Street considers the drug dead.
Merck’s swoon dragged down the Dow Jones industrial average and reminded investors about the riskiness of drug development.
The company said on Thursday it stopped giving the drug to some patients in two late-stage trials at the recommendation of a Data and Safety Monitoring board. Such boards often require changes to trials, or halt them, when safety issues arise, or when a drug shows clear effectiveness or lack of effectiveness.
The setback for the high-profile medicine presents an early challenge for Kenneth Frazier, a longtime Merck executive who just days ago replaced Richard Clark as chief executive. Frazier has been counting on revenue from Vorapaxar and other Schering-Plough drugs to offset plunging sales of Merck’s $4.8 billion-a-year Singulair asthma treatment, when it faces U.S. generic competition next year.